Geoff Frost

As former CEO of Bartter / Steggles, Geoff headed up the company’s transition from a $35 million company in 1987 to more than $900 million in 2008, implementing business improvement programs to reduce debt by $20 million per annum and restructuring the Sales function to better meet customer needs.

Since 2008, Geoff has been involved in various due diligence roles and has assisted with the evaluation of potential business acquisitions by individuals and equity investors.

John Day

With a reputation for strategic thinking and a realistic approach John has had more than 25 years of General Management and Senior Management experience in blue chip companies such as National Foods, Simplot, Mars Confectionery, Masterfoods, Uncle Bens and Bowater Scott. He has held General Manager roles across a number of functional streams including Sales (all Channels), Marketing, Distribution and International and Domestic Business Development. In addition he was General Manager of National Foods Milk Operation (Victoria) and on the Board of Management with Simplot, heading up the Shelf Stable Division with brands including Leggos, Edgell, and Plumrose.

John’s expertise covers all channels including Grocery, Convenience, General Route, Catering, Institutional, Distributor, Delicatessen and other Foodservice Channels. Whilst he has had many successes and achievements in this time, from a Grocery perspective he led the team which achieved the biggest Housebrand Tender in FMCG, that being the Woolworths National Milk Contract in 2002 for National Foods.

Geoff and John join our core members Peter Huskins (ex Senior Exec & Board levels with Franklins, Millers & Grace Bros) and Margaret Haseltine (ex CEO Mars / Masterfoods) to provide a comprehensive and results-focussed business strategy service for our clients.

Click on the links to find out more about our Business Regeneration & Strategy services.

You can also download our handy Business Success Scorecard.

#1 Coles Balgowlah – Stockland Mall

Gee it’s nice to see a supermarket retailer doing something a little different and in some instances just plain logical. The new 4000 sq mtr Coles at Balgowlah is a hybrid of some of the initiatives unveiled at more recent openings such as Chatswood here in Sydney and Ivanhoe in Melbourne, plus they’ve added a few more whistles and bows as well.
It certainly marks a clear point of difference between the WW latest format and that of the old style Coles formats….and mostly for the better, and about time the trade are saying.

Theatre and Shopper intimacy have made a welcome return and don’t the locals like it!

Some great points:

• Open front without security gates or trolleys across checkouts which treats us all as valued Customers not suspected thieves
• Well lit open feel with wide aisles and low height fixtures, well merchandised and a good weight of stock
• Low height Dairy/ Chiller cabinets adjacent to Fresh depts. – logical
• All bread together, in house bakery and Proprietary bread – logical (shoppers buy bread and don’t intentionally shop either/ or – have a look at a shopping list!)
• Milk at the front of store – logical, for small baskets and big alike
• No big bulky ends – an aisle of value down the middle which is just as aggressive

Theatre:

• Open meat counter with real live butchers you can ask a question of
• Fish dept that again has a fish monger feel with knowledgeable staff
• Fresh vegies and fruit on ice
• Salad bars
• Indian naan bread oven
• Cheese, cheese and more cheese
• Plenty of sampling and spruiking
• Staff that are actually interested in helping you, bubbly pleasant personalities and plenty of them
• Pharmacy, Baby, checkouts, new uniforms….and the list goes on.

Points to work on:

• Why isn’t freezer near the entrance with the rest of the fresh/ chilled depts? This consigns the Freezer to back up supply only rather than the location of genuine dinner tonight or lunch tomorrow meal alternatives.
• Bakery would be better at the front, but hey, something has to give
• Home Entertainment (DVD’s and Magazines) looks like it was a last minute add on rather than a considered strategy/ location
• The Seasonal Wall in the back left hand corner appeared to be a patch up, seasonal stock requires a high profile location to get the most out of the impulse nature of seasonal lines and this location will get a low % of store traffic – it’s behind Petfood and Laundry
• Will they cross merchandise the store? The open space cries out for it.
• Location and access to  Vintage Cellars, pity it’s a fire/ smoke wall

Let’s wait and see:

• Will this store fade after the traditional new store opening honey moon period?
• Will the higher potential GP mix that is being targeted return the investment in fitout and higher running costs such as wages?
• Will the out of stocks and the poor standards return or will the current high standard be maintained?
• Will this store be the direction for the future (you’d have to think so based on the recent openings?)
• Will this snap WW out of their cookie cutting lethargy?
• Will this format be transferrable to other footprints? Will it translate to a 1600 sq mtr store for example as all stores are not of this size.

Conclusion – a great store – do yourself a favour and pay a visit!

The “New” Franklins at Mosman and St Ives

And now for something completely the opposite – we were pretty disappointed in these stores after hearing the PR that went ahead of the launch. Franklins supposed ‘store of the future’ looks like it is a throwback to the 80’s and 90’s and quite like an older generation WW or Coles store.

The St Ives store has a freshened feel about it with an added Deli/ Meals/ Bakery area but the fixtures and design treatment are dated.

• The font for the dept signage is white on a timber background and does not stand out
• Weight of stock and range was average and did not make a statement
• Grocery/ centre store felt cold and uninviting, very wide aisles with little merchandising, few cut carton displays or anything to tempt Shoppers
• Produce bins looked a direct copy of the old WW units
• Traditional layout with traditional category treatment – certainly not a progressive format
• Good South African ranging but if they couldn’t get it right in this store (and with the current ownership) I’d be pretty worried!

The Mosman store has just been relaunched, again with a refreshed feel. This store is adjacent to a booming Harris Farm Market and Franklins have added a small (read meagre) range of fresh and baked products plus a Deli area, but the width of range and display was poor leaving you with the impression they are going through the motions but not really serious about a genuine offer and therefore a genuine competitive contender.
Again :

• wide aisles but with little to no theatre
• traditional category treatment
• no real attempt to leverage the local affluent Shoppers
• No WOW to much at all in the store

Is Price the ace card Franklins used to play still valid? Still surfing off reputation more like it and these formats do little to support the myth.

Conclusion – Mr Luscombe and Mr McLeod don’t have much to worry about.

In the second of a series of 5 articles about achieving retail objectives, ShopAbility discuss the key retail objective of AWOP; its applications for shopper behaviour, and how to leverage it for category growth.

Our first article  introduced the concept of the key retail objectives being a 5-Way Multiple: Frequency, Traffic, Incidence, AWOP, and Spend (this article is re-published here at www.sh-opportunity.com.au if you missed it).

By orienting your strategies around these retail objectives you grow your relevance and relationships to Retailers and Shoppers, thereby driving category growth and profitability.

While the first article focussed on Frequency and Inter Purchase Interval, today’s article centres on Average Weight of Purchase as a lever to drive growth.

Future articles will cover:
3.      Basket penetration and incidence
4.      Traffic driving
5.      Trial management.

In our experience many suppliers are not yet aligning their business strategies and operations clearly enough with retail objectives. These articles focus on specific retail objectives and how to use them for win-win growth for both you and the retailer.

What is AWOP?

Average Weight of Purchase is one of the key retail drivers.

AWOP:     Average Weight of Purchase refers either to the number of items in the basket, or their weight in kilograms or litres. A common retail goal is to increase AWOP, which can also amount to an increase in Spend. A common way to achieve this retail objective are promotions such as ‘2 for the price of’ and ‘3 for the price of’ to drive multi-item buys. Alternatively, promotion of larger pack sizes can result in a higher weight in kilograms or litres.

A related retail objective is Basket Value (also called Transaction Value).

Basket value:    Also called Transaction Value, this is the total $ value of all items in the basket. Common ways to increase this are encouraging the purchase of more items (increase basket size) or increasing the value of selected items via uptrade to bigger packs or higher value products.  Achieving this retail objective also amounts to an increase in Spend.

The relationship between AWOP and Basket Value

Increasing AWOP will either have no impact on basket value or will increase it.

The relationship between AWOP and Basket Value can be described in the table below:

Fig 1: Relationship between AWOP and Basket Value © Shopportunity 2009

The only way in which basket value would decrease when AWOP increases is to offer multiple items or larger sizes for LESS THAN the price of a single item or smaller size. This is a highly unlikely scenario and you’d only pursue this as a loss leader strategy short term share grab.

How does AWOP relate to Frequency?

In our last article we discussed Frequency, which is the number of times your category and product is shopped over a defined period of time.

What increasing AWOP and Basket Value essentially does is achieve more dollars or more items this trip, by either encouraging more items in the basket, or higher value items.

What increasing Frequency does is achieve the same dollars more often with more trips. The same dollars more often = more $ overall, over time.

Whilst the objectives are separate, one can negatively impact the other – see Diagram below.

Fig 2: Relationship between AWOP and Frequency © Shopportunity 2009

You need to find the balance between Frequency and AWOP as you can’t increase both at the same time.

How are AWOP and Basket Value built in to your KPIs and planning?

Do you know what the AWOP is for your category, subcategories and at brand level vs how your particular product performs against competitors? Do you know what the AWOP is in similar categories, and what shopper behaviour drives that?

Do you have plans to increase AWOP both strategically over time and tactically using specific promotions? Do you have clearly defined targets for both your brands and the retailer? Your relationships with retailers will strengthen to the degree that you have clearly defined retail objectives in your category, marketing and customer plans.

Why are AWOP and Basket Value important?

Because they have a direct relationship to dollars per shopper per trip. Increasing AWOP and Basket Value in a given category helps drive the top line for the whole store.

A key point with AWOP is that unless you marry your average weight increase with an increase in consumption for your category, you may merely bring sales forward, particularly in categories with non-expandable consumption. Great for short-term targets, but no real benefit in the longer term. How do you address this?

Understanding shopper behaviour and consumption occasions in your category is key. By increasing relevance through occasion-based marketing you can increase AWOP for the long term, not just the short term.

Let’s take skin care. Once upon a time, the skin care usage occasion generally involved three simple steps: ‘cleanse, tone, moisturise’. Now we have ‘cleanse, exfoliate, treatment, moisturise, protect ‘(from sun and ‘free radicals’). ‘Treatment’ as an occasion example can also include several products: masque, serum, pigmentation treatment, eye treatment, spot treatment; the list goes on. All of these specific purpose products serve to increase AWOP in the skin care category, by increasing the number of items in the basket. It is also likely that Basket Value is boosted through higher value items in the basket, such as the ‘treatment’ products. Another common way to increase AWOP in the skin, hair and personal care categories in general is via gift and multi-packs; buy the shampoo and conditioner pack for a value price compared to just the shampoo.

AWOP can also increase brand loyalty by expanding the range of products with which the consumer has a relationship (such as the skin care example). By demonstrating value with the shopper and consumer, either through value-based bulk packs and pricing, or more products in the basket, you create total value perception.

AWOP applied to shopper behaviour

Similarly to our last article on frequency, AWOP in a given category also depend on the nature of the category, the number and type of occasions the product is used for, what kind of shopper they are, and from what household type.

Let’s look at milk. A family of four may default to a 2 or 4 litre carton of white milk in their stock up or top up shopping basket. But what about the occasions for different types of milk based on different family members? The adult female in the family may choose a 1 litre skim or lite option just for herself. If there is a mid to later life stage female in the family, she may opt for calcium enriched, also in a 1 litre. Children in the family may enjoy flavoured milks for occasions such as gut fill after school. These may be in 250ml packs, or even less. You may have a health-conscious member of the family that prefers to buy soy or long life organic milk from the ambient aisle.

By understanding all the occasions for milk in this particular family, you can increase AWOP substantially by promoting across the range to a single shopper, beyond just upselling to larger packs.

How would you activate against that in store? It depends on the channel. In grocery, you may think about secondary locations for different types of occasion. Flavoured milk, for example, can also be an impulse purchase as part of a top up shop, and may work on a gondola end or near the counter. Simply having your flavoured milk near the counter may increase the number of milk items in the basket from one (plain white milk) to two or three.

Last article we discussed how retail objectives need to be considered in relation to each other. You don’t want your increased AWOP to result in decreased frequency, for example. Again, this depends on the category and shopper / household type. Looking at milk again, by increasing the appeal of a range of milk options you are expanding the category, not just bringing sales forward and decreasing frequency.

The relationship between range and AWOP is critical in terms of increasing the number of items from the category in the basket. Therefore, new product development (NPD) can also be a key way to grow AWOP in your category. This can be especially effective if you are targeting a particular type of shopper and their profile. Back to skin care: the thirty or forty-something female shopper who cares about the way she looks, is concerned about aging, but is not likely to buy high-end products, may shop for skin care in grocery. Brands like Olay and L’Oreal play to this shopper brilliantly; producing a never-ending range of reasonably priced anti-aging skin care products that increase the number of skin care items in the basket, increasing AWOP, and increasing the $ value of items in the basket, thereby increasing overall Basket Value.

5 Ways to Increase AWOP

1. Increase the range of products and pack sizes shoppers can select, based on occasions
   • By increasing range, you avoid simply bringing sales forward through larger pack sizes for only one product
   • Offer a range of pack sizes for each product to increase consumption occasions (such as the 250ml flavoured milk for a treat or gut fill immediate consumption occasion versus the 2 litre white milk for planned stock up shop purchase)
2. Smart multi-buys across product portfolios
   • Instead of 2fors and 3fors of the one product, span your multi-buy promotions across a range of products so as to increase consumption rather than just bring sales forward. Example: shampoo, conditioner and treatment packs.
3. Trial pack promotions
   • Promote your newer or less popular products by combining them with your tried and true products in trial packs e.g. buy this doggie roll bulk pack and trial a free pack of doggie treat. This way you increase AWOP whilst growing the overall category and building brand loyalty.
4. Differ your AWOP pack strategy by household type
   • Have you considered all the types of shoppers that purchase your products and what kinds of households they come from? Don’t forget that people living in small spaces with limited storage can also drive AWOP buy purchasing multiple small, high-value items.
5. Introduce value and bulk lines
   • Introducing a value line in your category can increase AWOP through increasing kilograms or litres purchased.

Love your Weight

Let’s face it, the AWOP opportunity is one of the few times in life where you can enjoy increasing your weight, so do it with relish!

Think about your shoppers, consumers and retail partners. Think through the consumption and shopping occasions for your category, portfolio and products.

Identify the gaps; range, pack sizes, promotion strategy… what’s missing? How can shoppers be encouraged to by more litres or kilograms of your product, or more items from your portfolio? How will this contribute to overall category growth?

Measure where AWOP is now, in relation to your overall category and your company portfolio. Set a realistic target to increase it either through weight per item or number of items, or both. Develop a holistic plan across category, brand, customer and promotions.

Make sure you consider the 360 degree view, and how increasing your AWOP may affect other retail objectives such as frequency.

Then, enjoy your weigh-in … both you and the retailer will be The Biggest Winners rather than The Biggest Losers.

Next time, Basket Penetration and Incidence. In the meantime we welcome feedback from you. Email us at enquiries@sh-opportunity.com.au

The concentrated and restrictive grocery marketing environment in Australia is expected to loosen over the next few years, giving marketers more choices in how they get their brands to market and promote them instore.

Coupled with new best practice thinking and tracking tools around trip management and segmentation, and the growth of shopper insights, we are on the threshold of a new, smarter, but more complex grocery retailing era in Australia. One size will no longer fit all, so it’s not a question of which horse you back, but rather which selection of horses you run on which tracks.  Here are some of the headlines coming out of the USA underscoring this trend.

Economic slowdown and the accelerated decline of the middle market
Upscale vs value retailing, and the polarisation of retail
Grocery retailing in the USA is segmented, with basic and budget grocery retailers such as Smart & Final and Vons at one end, as well as fresh grocery offers within WalMart and Target supercentres, and then upscale grocers and fresh markets such as Whole Foods and Bristol Farms at the other. (See diagram). Differentiated offers along the spectrum are often operated by the same retailer, such as Safeway, who have Pavilions at the upscale end, Ralphs in the middle, and Vons toward the value end.
In Australia, grocery is currently almost exclusively middle market, but there are signs of change. Woolworths is currently trialling a more upscale small footprint grocery store called Thomas Dux, but as yet there are no widely available upscale grocery chains with holistic meal and fresh offers.  However, some top end providores such as Jones the Grocer are increasing their distribution into shopping centres. And Aldi, and the soon-to-arrive Costco, spell the arrival of budget buy-in-bulk grocers and warehouse clubs.

Trade up vs Trade Down
The economic slowdown and rising fuel prices in the USA is resulting in a polarisation of shopper behaviour, which we can expect to see mirrored here over time, albeit not quite as distinctly. Shoppers are consolidating their shopping trips to save on petrol and to get better bang for the buck in the shopping basket. This is resulting in a shift back to stock-up and one stop shopping for the basics, particularly in supercentres, with specialty and upscale retail reserved for ‘destination’ trips.
Shoppers are trading down on products and categories they don’t care about, and trading up in the ones where they do.
Marketers need to understand where on the trade up/trade down scale their products fit, and which types of retail channels they are therefore best suited to.  You don’t have to be everywhere, just in the right places with the right product!

Differentiation, differentiation, differentiation
Different retailers, different strategies
Coles, Woolworths, IGA and Metcash all range a combination of well known brands and private label. Aldi is almost exclusively private label.
Costco is a different model again. A paid membership warehouse club, they only range 4000 skus (compared to an average Coles or Woolworths store with 30,000), 60% of which are general merchandise items (40% is traditional grocery and fresh). Two-thirds of products are job-lots on limited-release sale periods to create a feeling of ‘treasure hunt’ with shoppers … ‘I’d better get it today because it might not be here tomorrow’. Products range from high value items and luxury brands such as Tiffany jewellery and backyard swing sets, through to bulk 30-pack toilet paper.
We anticipate Costco will steal shopper share of wallet not only from the large grocery retailers, but also from department stores and mass merchandisers.
What all this means is that marketers will need different go to market strategies for each individual retail customer. This may mean a private label product for one customer and a branded one for another, or both within one retailer, and probably special packs and products specific to individual retailers.

Different trips, same shopper
It’s all about trip management – optimising the type of mission, or ‘trip’ the shopper is on. In the USA grocery retailers are beginning to execute against specific times of the day, for example with a huge range of ready-to-eat lunchbox style meals, and choose-your-own pick-and-mix salad and hot food bars, for immediate consumption at lunchtime.
Work has also commenced on mapping shopper traffic flows by trip type. These maps are then matched against basket data (analysis of the primary and most valuable items in an individual shopping basket) to create trip ‘clusters’ eg Dairy Demand, Mostly Meat, Constant Cravings, Fresh Fixation.  Retailers are then co-locating products from different categories together according to the trip cluster.

Different shoppers, different store offer – Segmentation
Two major schools of thought are emerging here. The first is that there are overarching shopper archetypes per category. Ie, that each category only has 4 different kinds of shoppers, who might be things like Proactive Planners, Experimenters, Basics Only, or Comfort Seekers.  These would change from category to category. This archetype thinking is similar to the work that Nielsen have been doing around shopper ‘modes’, or ways of thinking and behaving, in specific categories.
The second school of thought, and the slightly more mature one in terms of successful implementation in market (see the success of Food Lion’s segmentation strategy resulting in their Grocery Retailer of the Year award in 2007) is segmentation at a store level, based on who shoppers are and how they behave.

This type of segmentation can be cut in a number of ways, ranging from attitudinal, product affinity, behaviour/lifestyle, and demographic/socio economic, through to spend/value and promotional requirements. Ultimately the kind of segmentation employed should be based on your goal, and turned into meaningful clusters based on the way retailers would actually execute.
The point is that it is done from the market (consumers and shoppers) inward to the store, and THEN matched against store shopper and loyalty data, rather than using store data first and then pointing it outward and hoping it fits the shoppers.
Segmentation is a fast-evolving area of thought. The main message is that one size does not fit all, and that product ranging and go to market strategies including space, promotion, pricing and instore media, will change from store to store.

So the takeouts for marketers in this changing marketplace are that they need to review the retail channels they are in, what products they are there with, and how their go to market strategies should differ at a trip, shopper, store and retail customer level.

How many horses do you need, what should the jockeys’ colours be, and where will they all run?

1. Have there been any major shifts in consumer shopping behaviour in the last year (in general, but also amongst specific demographics)?

Rather than a right-angle turn in behaviours in the past 12 months, there has probably been more a continuation of what we’ve been seeing over the past 5 years, particularly the rise and rise of single person households, which now account (according to a Mosaic report last week) for just over 25% of Australian households. These households are predominantly urban white collar, with a high amount of disposable income and a highly social lifestyle.
This is contributing to the decline of traditional stock-up shops and the rise of top-up shops, where people are now shopping for their dinner tonight up to 5 times a week.

Having said that, the big one over the past two years, in line with climate change awareness and concerns, would be the rise in importance to shoppers of sustainability – ethical and carbon neutral products, food miles etc. Region of origin (the closer to home the better) will become more important across a range of categories. We are seeing the development of a shopper group who shop philosophically based on their (ethical) values. ‘Hippie’ values are becoming mainstream.  This same trend, combined with Tribalism, is behind what Michael Morrison at ACRS (Australian Centre for Retail Studies) refers to as the Village Economy – people are shopping closer to home because it’s their local, they’re known by the store staff, they believe the quality is better and that goods have not had to travel as far. Viz the growth of IGA local supermarkets in recent years.

There are a number of other longer term consumer trends also impacting shopper behaviour.  These include Premiumisation (trading down to private label for goods of lesser importance so I can spend more on gourmet and premium items); Personalisation; Ageing (and the denial of this – the role of anti-ageing products); Urbanisation (thus shopper and retail segmentation will become increasingly important); and Anxiety (and the role of day spas and R&R/health and wellbeing products).

2. Are there any groups spending noticeably more time in the shops? Any spending less?

This depends on the retail channel (type of store) and reason for going (shopping mission).
In general, the groups spending most time in stores are those for whom shopping (browsing occasion) is a leisure activity or who have more time on their hands. This includes teens, and pairs/groups of women 25-40 (often SINKs/DINKs), and the over-55s.

The quick trip and destination type shops (I’m going for these one or two specific things and that’s it) are growing to become the dominant type of shopping trip – a convenience oriented trip where shoppers are in and out quick. Combine this with the growth of online for research (and a thus the consideration set being solidified before the store is entered) means that overall time in store is decreasing. It’s therefore important that stores are clearly laid out and uncluttered, and highlights the role of instore media to facilitate quick easy decision making among the shopper’s pre-formed consideration set.

At the other end of the spectrum, the past 5 or so years has consolidated the role of shopping as leisure activity for shoppers in malls and factory outlets/outlet centres. Shoppers on these types of leisure trips are likely to spend several hours in a mall and are more likely to have a higher basket spend.  Who these shoppers are again depends on store type – a trip to Bunnings is a kind of leisure browsing activity for blokes, where women are more likely to pair up and go to the mall and include lunch in the outing. Shopping-as-leisure trips are highly open to influence.

Globalisation and the internet has seen the rise of online retailing. Still only a small percentage of retail occasions (under 10% in Australia, and that includes travel etc) it is growing quickly. The key reasons shoppers use the internet are that they can get something overseas that they can’t get here (variety and uniqueness), and/or it’s cheaper online. This is mitigated by barriers such as perceived quality and freshness (eg for perishable groceries) or risk of poor sizing/fit (for fashion). Those shopping retail online are mostly a consumer group known as Neos who use the internet to facilitate all aspects of their lives from dining out to finances. Neos are likely to be time poor, white-collar Generation X in well-paying jobs (and thus often also SPUDs).

3. Are there any new categories of shoppers that advertisers should take note of?

SPUDS (single person urban dwelling). [See the Shoportunity article on this on our blog].

The ethical/conceptual type shoppers referred to in Q1, who will accept or reject a brand or product based on where it comes from and how it’s made.  And you need to a) act fast – first mover advantage – ie the new Green Beer – will only last for the next 6 months or so, and then being green will be the cost of entry rather than a source of competitive advantage; and b) be able to back up your claims as shoppers will become cynical about green statements all over everything.

Because the same shopper’s behaviour can vary across retail channels, categories, and shopping mission types, I also see a greater role for occasion based messaging in instore advertising (and above the line advertising) to get cut through.  Product and price alone isn’t always enough. Show the product in its usage occasion, or talk to the shopping mission eg ‘The Perfect Gift solution’.  What occasions can you own or become known for with your product?

4. Recent figures show older people in the 40-54 age bracket are visiting malls the most frequently. Is this unusual? Why? What typifies their shopping behaviour?

Young Families (ie kids under 10, with parents mostly 26-38) have the least time. 40-54 age bracket is more likely Older Families, who not only have more time (teens more independent) but are more likely to take the kids on shopping trips as a leisure activity.

5. Who is spending the least amount of time in shops, and why?
My hypotheses:
* Parents of young families – too much of a hassle/too expensive to take the kids, budgetary constraints, too busy ferrying kids around.  Life is about the kids in general with less ‘me time’
* SPUDs/NEOs – time poor, convenience driven, out of home a lot due to work and socialising. (Exception – shopping-as-leisure-outing occasions).
(See previous answers).

6. Are there any untapped markets or demographics in the retail space?

Men in general aren’t adequately catered to in terms of shopping experience – either shopping alone or in mixed company – when you consider that men are nearly 50% of grocery shoppers in Australia.  (So much for Mum being the ‘main grocery buyer’!)  In terms of categories, I see a real role for skincare and grooming products for ‘the average Aussie bloke’ (not just ‘meterosexuals’ who are generally sneered at by the aforementioned Aussie bloke).  And given the recent baby boom, and number of men becoming fathers for the first or second time, there is a role for more ‘macho’ baby strollers etc.

While we’re on the baby boom, many stores don’t cater to parents with strollers (one of the ‘hassle factor’ reasons parents of young families stay away from stores).  Stores wishing to attract parents of young children need wide aisles and helpful friendly staff – these parents just want their job made easy and decision made for them!

Also the retail and FMCG sectors don’t yet adequately cater to the ageing population with layouts, product heights, signage (failing eyesight) etc. If you have a product targeting 55+ year olds, print the product name in a LARGE font with a big picture.  Functional wins every time!

7. What do shoppers generally want from their retail experience?

In general order of priority:

1. Convenience and Accessibility:
Is it nearby?  Does it have (lots of) parking? Can I get in and out quick?

2. Range and variety:
Does it have what I need today/the brands I usually buy? Can I find something new there?

3. Layout:
Can I get around the store quickly and easily? Is it obvious where each category is? Can I find my category/product quickly without hunting about?

4. Service:
Do they acknowledge me? Do they know me and what I like? Do they know what they’re talking about?  Do they leave me alone if I want to be left alone and not jump on me the minute I walk in the front door?

5. Value:
Is it good value for money (not necessarily ‘the cheapest’)? Is it good quality for the price?

6. Fun and ambience:
(This is the one most retail is lacking in Australia!)  Is it fun shopping there? Will I learn or see something new? Can I interact with things? Is the store clean, well lit, smells nice and a relaxing or stimulating environment with nice music? Do I feel encouraged to hang around and discover new things?

8. How would you profile the personality of the 2008 shopper?

Schizophrenic!:
* Trade down on the basics so I can trade up on the gourmet and premium stuff
* Quick trips and destination shops for the basics so I can spend more time shopping for leisure
* Seeking happiness, health and wellbeing but increasingly anxious
* Becoming more global in my research and status brands, but more local in where I shop and where the products I buy come from.

9. Is the busyness of life and general reduction of time an issue when it comes to shopping?

Absolutely as it reduces the ability to influence instore. The game is about making shopping trips quick and easy.  Price is increasingly used as a mechanism to make a quick decision rather than the reason to buy in and of itself. The more relevant you are the more likely your product is to be selected.

The role of instore advertising is reminder via disruption. Advertisers need to find ways to disrupt shoppers in non-irritating ways through both placement and messaging.  Occasion based messaging will cut through.

10. Are shoppers in malls to spend money, or browse? Do they make most of their purchasing decisions there and then?

This comes back to shopping mission (trip type). The most common reasons for visiting malls, in order, according to Newspoll include:
* Grocery shopping
* Clothes shopping
* Gift shopping
* Browsing (social/recreational)
* Specific store shopping
* Services shop (eg financial and roads/infrastructure services).

70% are there to shop for something specific, with somewhere between 12 and 20% there to browse. So you most shoppers are there to spend money rather than suss out the lie of the land for a later purchase.

11. Where do you think consumer retail is headed in 2009 and beyond?

I think we will see the market polarise into big box retailers, large chains, and small/niche players.  The small and niche players will start to populate the smaller malls (which are growing in number), the large chains will stay in the large malls, and big box retailers will be strip destinations.

I’d like to see retailers spend more effort on providing a fun experience – a bit of theatre instore, not just product and price. Show usage occasions. Provide education and interaction. Shoppers who handle a product are 50% more likely to buy it.

I also see there is a big opportunity in cross channel retailing that we are only just starting to tap into here – ie ordering via catalogue or online and then picking up instore, or ordering instore and having the product delivered to your home.

Lastly, the smart money will be on retailers who can localise – who are able to tailor their ranges and offer to different consumer demographics in different locations on a store-by-store basis.  This has been done in the USA for the past 5 years at least, we’re yet to start it in a meaningful way here.  Retail media companies are able to provide this level of segmentation, but retailers, suppliers and media planners are yet to take advantage of it.

ABOUT NORRELLE GOLDRING AND SHOPABILITY
Norrelle Goldring is one of the directors of ShopAbility, an Australian based strategic shopper marketing company that specializes in creating and implementing InStore Marketing and Category/ Channel Development strategies and initiatives.

The ShopAbility offer extends across Insight development, Strategy, Implementation, Capability and Training.

ShopAblity offers training courses for marketers, including shopper insights training and a shopper and instore marketing fundamentals course.  Two fully hosted retail study tours to the USA are also being offered for May 2008.

For more information, visit www.shop-ability.com.au

Norrelle Goldring
M: +61 411 735 190
E: norrelle@sh-opportunity.com.au

US retail trends generally hit Australia 2-3 years later so this is your opportunity to be forewarned and forearmed, as well as gain a lot of new ideas into creative retailing and in-store marketing.

Tours include:

• One of two conferences
• A fully hosted set of store and trade visits across 4 major US destinations
• Meetings and interviews with key industry executives
• To read our Retail Tours brochure and details on costs and bookings, click here

Option 1: The FMI Show (Food Marketing Institute) Tour

Las Vegas 4-7 May
Hosted by Peter Huskins

Who it’s for:

• Sales directors, national sales managers, key account managers and business managers

Why go:

• FMI Show is the largest and most comprehensive food industry exhibition and seminar event in North America, attracting the world’s top retailers and wholesalers
• Hear industry leaders, retailers and suppliers deliver thought provoking strategies that really work

What you’ll learn:

• The latest tools for expanding your market reach and keeping your sales on the cutting edge. Education sessions cover technology, consumer insights, store operations, health and wellness, and sales/marketing merchandising
• Hear success stories from leading retailers on how suppliers have gained traction with them and grown their categories
• See examples and newest Technologies in the major exhibition that adjoins the conference as well as Organics, Pharmacy and PL
• The latest in food NPD and packaging

Details:

• Booking deadline for the conference and tour is 5 April – tour departs 30 April
• FMI conference held at Mandalay Bay in Las Vegas 4-7 May
• Focus is hands-on learning from exhibitors and best practice examples from exhibitors and suppliers
• Ideal for senior sales and operations people
• Learning seminars include sessions on Retail Technology, Consumer Insights (personalization), Store Operations (retail technology, shrink and asset management), Health and Wellbeing consumer needs, Leadership and Talent planning, Merchandising best practice case studies, kids and branding
• For more conference specific information visit www.fmi.org/events
• US$450 (AUD$480) gets you entrance to the exhibition (800 exhibitors) plus learning seminars
• $4,500 AUD gets you a fully hosted Shopportunity retail and industry tour program (excluding flights, accommodation, meals and conference registration)
• The tour includes a 3-state retail tour hosted by Shopportunity, across grocery, mass, petroleum & convenience, pharmacy, mall and department stores
• Also includes meetings with key executives from syndicated data and strategic marketing companies in the US
• To read our Retail Tours brochure and details on costs and bookings, click here
• We can book your entire tour itinerary, or you can book to your specifications. Phone Peter on 0412 574 793 to register your expression of interest.

Option 2: Consumer 360 Conference

Phoenix 3-5 June
Hosted by Norrelle Goldring

Who it’s for:

• Marketers, trade marketers, category and channel managers, insights managers, marketing agencies

Why go:

• The #1 marketing information conference for the consumer packaged goods (CPG) industry in the USA
• Speakers are the top retailers and CPG marketers in the USA
• In 2007, more than 1,000 industry professionals attended – including us at Shopportunity. Attending will change how you think about, and go to market with, your products here.

What you’ll learn:

• Industry hot topics and how to solve them based on top company case studies
• Industry best practice thinking and execution
• Best use of your instore marketing $$
• Actionable consumer and shopper insights
• Trends on the horizon – see what’s likely to hit Australia in the coming years, and be prepared!
• Example sessions from last year: creating new retail brands, making segmentation work, influencing choice through packaging, capitalising on health and wellness, clear aisle management, CRM, activating in the convenience channel, private label as marketing tool, shopper modality, superior consumer insights.

Details:

• Booking deadline for the conference and tour is 5 May – tour departs 30 May
• Consumer360 conference held at JW Marriott in Phoenix 3-5 June
• Ideal for marketers, and category/channel/trade marketing practitioners
• Featured speakers include senior personnel from Tesco Fresh & Easy and Walgreens
• Extremely content rich 3 day conference. Sessions include:
  • Range: assortment localisation/consumer led ranging (talks directly to what WW are doing here); private label 2008 and beyond; minimizing out of stocks
  • Space: optimising limited space
  • Shopper behaviour: optimising shopper decision paths; shopper insights; traffic driving and increasing basket size by maximizing shopper missions; shopper segmentation and targeting (plus learn about/how to use the Nielsen segmentation tool called Spectra)
  • Price: taking price in an inflation environment
  • Consumer and shopper trends: health/wellness and sustainability; what’s hot around the globe
  • Marketing and brands: matching your brand to shopper audiences; defensive branding; identifying and optimising growth opportunities; brand forecasting laboratory; CRM in shopper environments
  • Channel: convenience channel evolution; pharmacy in grocery; retail health clinics
• For more conference specific information visit www.consumer360.com
• To take advantage of US$300 conference discount, bookings must be received to Shopportunity by 13 April (US$1695/AUD$1800 vs US$1995 full price)
• $4,500 AUD gets you a fully hosted Shopportunity retail and industry tour program (excluding flights, accommodation, meals and conference registration)
• The tour includes a 3-state retail tour hosted by Shopportunity, across grocery, mass, petroleum & convenience, pharmacy, mall and department stores
• Also includes meetings with key executives from syndicated data and strategic marketing companies in the US
• To read our Retail Tours brochure and details on costs and bookings, click here
• We can book your entire tour itinerary, or you can book to your specifications. Phone Norrelle on 0411 735 190 to register your expression of interest.

More Details

To capitalize on this industry learning opportunity, please register your interest with Peter Huskins 0412 574 793 or Norrelle Goldring 0411 735 190 as soon as possible, as these tours are only weeks away.

Download our 2008 Retail Tours brochure with more detailed itinerary
www.sh-opportunity.com.au/shopportunity-2008USA-retail-tours.pdf